RAMSEY CROOKALL & CO

EVENING REPORT

Hopes that the euro-zone situation had been resolved by the agreement of a bail-out package for Ireland have proven premature, with rising Spanish bond yields suggesting the prospect of Spain being the next recipient of an EU/IMF aid package. This as well as an underwhelming response to the latest Italian bond

auction rattled investors. However, banking stocks and a few gold miners held up well while the rest of the blue-chips were in retreat.

Royal Bank of Scotland, which has the largest exposure of the UK banks to Ireland, clung on to gains while HSBC is the best performing leading stock.

Bank of Ireland vowed to raise the €2.2bn demanded under the terms of the Irish bail-out through its own efforts and without the help of the Irish state. The Irish bank has to raise the additional capital by the end of next February or else get the cash from the Irish state, which would amount to effective nationalisation.

Irish Life & Permanent Group Holdings, meanwhile, said the new 12% capital requirement for its Permanent TSB banking arm will have little impact on the group, and will be met from its own resources.

Insurer Aviva was lifted by JPMorgan Chase slapping an “overweight” recommendation on the stock with a 524p price target, but the US investment house is less enamoured of Resolution, where it has an “underweight” rating for the stock, as it sees better opportunities elsewhere in the sector.

Travel firm TUI Travel provided a ray of sunlight, advancing after disclosing it is to sell its Thomson Al Fresco business to Homair Vacances. At 30 September 2009 the net book value of the assets being sold was £10.3m.

THE FTSE 100 CLOSED DOWN 117 @ 5550

THE DOW JONES AT 4.30 IS DOWN 121 @ 10,970

THE NASDAQ COMP AT 4.30 IS DOWN 26 @ 2127

Exchange Rates

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